4. New Regional Expectations and South African Retail Investment in Mozambique

4. NEW REGIONAL EXPECTATIONS AND SOUTH AFRICAN RETAIL INVESTMENT IN MOZAMBIQUE Darlene Miller Introduction On 27 August 1997, Shoprite supermarket opened its doors in Maputo, the capital of Mozambique. In most cities of the United States, the opening of a food store would elicit only minor attention, perhaps a side-column in the local news. In Mozambique, Shoprite’s arrival was an event. The store was swamped with people crushing its designer-tiled entrance to gain access. Much fanfare, hype and local town gossip had preceded this event. On the day itself, celebrities were in attendance and a public rally was held at the Center. Of the two major newspapers in the country, both ran front-page coverage of Shoprite’s opening. Months after the event, debates continued to rage in the newspapers and amongst Mozambicans about the benefits and disadvantages to Maputo and Mozambique of this new South African arrival. Local traders complained that the special privileges given to Shoprite by the state and the local municipality give Shoprite an unfair advantage. Consumers said they appre- ciated not having to go to “mosquito-ridden” markets for their groceries. About two years later a huge public furore erupted in Maputo. The agent of consumer modernisation in Mozambique, Shoprite, was caught dumping expired food- stuffs on the shelves in its new Shoprite store in Maputo. The reaction to this discovery was loud and contentious. Maputo consumers asked whether South Africans thought they could be sold rotten wares. Was this to be the African Renaissance declared by the South African president: South Africa using the region as its backyard for dumping? Southern Africa and Challenges for Mozambique 117 Shoprite management frantically explained that the expiry dates had not been intentional but due to the way that Shoprite organises its distribution. Large retailers buy goods wholesale and get discounts on bulk stock with short expiry dates. While this system was fine for South African stores, this regional distribution system was not working in Mozambique where stock came from Gauteng and encountered delays at the border. Turnover was also slower on some items and so the expiries caught management by surprise. But Shoprite’s explanations did not fly with many Maputo consumers, with those who could afford it heading back to the Shoprite in Nelspruit, the nearest large South African town to the border (and also called “Thank you, Maputo” by locals because of all the Mozambican custom.) More forgiving customers or those with less choice argued that Shoprite needed to be given a chance. This account illustrates the advent of a new regional moment in Southern Africa. When South Africa turned the corner from apartheid, a breath of expecta- tion was inhaled in the rest of the continent. South Africa had a political responsi- bility to the region and the continent, (what may be called an apartheid debt). Anticipating a central role for democratic South Africa, President Thabo Mbeki declared that growth and development in the continent would be generated by South Africa’s liberation and that South Africa was perfectly poised for leadership of an African Renaissance. Post-Apartheid South Africa represented an economic hope for Africa, increasingly marginalised in the world economy. New regional expectations emerged out of this new political moment in the region, the moment of South Africa’s democratisation. These regional expectations rested on a number of assumptions. First, that political democracy would enhance South Africa’s economic position in the global economy. Second, that economic growth in South Africa would benefit the continent as a whole. Third, that South Africa would definitely have the option of fundamental socio-economic transformation under the helm of the ANC and the great leader Mandela. South African companies seized this political opportunity and forged upstream, opening up new hotels, buying up old mines, transforming old breweries, building new supermarkets and clothing stores. Many countries in Africa welcomed the transition to a continent free of white settler domination and waited for the ‘trickle-up’: as a leading economy on the southern tip of Africa, South Africa’s rein- tegration into the continent could open up a new era of economic prosperity and growth. The flagship shopping mall, Centro Commercial, where the Shoprite super- 118 Southern Africa and Challenges for Mozambique market was the anchor store, symbolised the dawn of a new era for South Africa and Mozambique who could now break with past hostilities between the white Apartheid rulers of South Africa and the nationalist Frelimo government. Post-Apartheid regionalism and regional integration in the 1990s, however, came to Southern Africa flying the neo-liberal flag of foreign investment. With democratic change came fresh attention to South Africa’s role in Africa. Following the global example, regionalism became an important political and economic strategy. Out of this re-evaluation, regional integration emerged as the dominant approach to regionalism, both in Southern Africa and other regions of the world. Governments, policy analysts and trade unionists present regional integration, like global integration, as a necessary good. The primary stated objective of regional integration is the coopera- tion of countries to create the best investment conditions for foreign capital. Neo- liberal regionalism and neo-liberal regional integration mean that regions should be capital-catchment areas. But different political approaches to both regional integration and regionalism are possible. The politics of regions are shaped by legacies, official lies and new realities. It is the new realities that are the focus here, shaped as they are by old legacies, and the expansion of the South African retail multinational, Shoprite, into Mozambique, highlighted both past and present regional contradictions. While expectations for the continent were high, the reality that has unfolded in the wake of post-Apartheid regionalism has brought new tensions to light. This article discusses South African investment and the retail environment histor- ically in Mozambique, emphasising the central role played by multinationals in the integration of the Southern African region. Surveys and semi-structured interviews were conducted with twenty-seven workers from Shoprite-Maputo between 1999 and 2001. The workers in the sample were chosen through snow-balling. However, with the help of the workers them- selves, an effort was made to attain a sample that was stratified by gender and occu- pational status. In order to facilitate a comparison with the Zambian case study, the same methodology was applied to research at Shoprite-Maputo. The sample was smaller because of interview translations from Portuguese to English. Shoprite- Maputo had created 169 jobs at their Maputo store (at the time of doing the research), a small number in a primarily agricultural economy where one third of the urban population lack employment opportunities (Department of Trade and Industry, Mozambique, 1996: 21). Southern Africa and Challenges for Mozambique 119 South African Investment in Mozambique With the lowest South African investment from the Apartheid era compared to other countries of the region, liberalisation of the Mozambican economy since 1985 has allowed a dramatic increase in South African investment. A new wave of investment, led by Portuguese and South African companies, has come into the country. Large flagship investments such as the Mozal aluminum smelting project tied to the Spatial Development Initiative (Maputo Development Corridor/SDI) have seen huge capital inflows tied to these specific projects in the last few years (Business Map, 2009). One of the frameworks for national development in Mozambique is the Maputo Development Corridor (MDC), a public-private initiative for development (Pretorius, 1999). The MDC is one of a host of SDI’s launched by the South African government. Consisting of industrial and construction enterprises clustered around the N4 road that stretches from Johannesburg directly to the port of Maputo, the MDC was jointly launched two years ago by the Presidents of Mozambique and South Africa.50 The project seeks to identify potential port/rail/EPZ complexes in underdeveloped target areas that could attract investors and promote local business. The partnership would entail significant outlays of public funds by the state joining up with private investors. Retail expansion is another significant South African investment trend in Mozam- bique. As one of the largest retail multinationals in South Africa, Shoprite made R70m/$10m available for reinvestment in Africa in 1999 (Shoprite Company reports, 1999 – 2005, www.shoprite.co.za.). With an overtraded local market, it leveraged its powerful conglomerate towards an African expansion.51 General Equity unit trusts at seven per cent make up the third biggest slice in South African retail behind banks, financial services and mining resources, the same sectors expanding in Africa. The Shoprite group’s historical experience in Africa since the 1960s through their clothing chain, Pep Stores, and their supermarkets in the black-run ‘homelands’ (nominally independent states) of South Africa gave them some organizational advantages. This experience with black consumer markets, their surplus capital and bold organizational leadership in the company’s upper echelons positioned them to best penetrate a consumer market perceived

Load more